WE Energies to Squash Distributed Renewables with their latest rate case.

Their current rate case being considered by the Public Service Commission proposes that on January 1, 2016 all Customer generation rate schedules will go to the following:

COGS-NM Tariff

Capacity demand charge of 3.794/month/KW installed

Facilities charge of 3.32/month for the generation meter

Annual Netting changed to monthly netting. Excess will be credited at .04245/kWh

For our 4KW installation, that will be $222/year or 1/3 of our total production. Their current advertising campaign paints us as customers who “don’t pay their fair share for the grid”. After netting out my solar, my current electric bill still averages about $200/month.

Anyway, our contribution to the docket which is 5-ur-107 on the Wisconsin Public Service Commission web site pretty much sums up the reality. Feel free to mine the data yourself at the 5-UR-107 Document site.

Here’s the content of our contribution:

I am a DER provider here in Wisconsin, currently billed under the COGS 8 rate tariff. I own a 4KW PV system that was commissioned in two phases. The first 1KW array went online in August of 2013 and the additional 3KW was added in June of 2014.

First, let me say this: I get the basic point. As a DER provider on the CGS8 tariff, I am allowed to use the grid like a huge battery. It eagerly absorbs my excess energy and net metering allows me to draw back from that battery when I need to at no additional charge. Every year the battery is “reset” and I am paid .04/kWh if its value is greater than zero. However, my CGS8 rate tariff was granted to me based on the fact that this wasn’t likely to ever happen.

So what is that battery worth? There are two studies that shed light on this in the docket’s document list. One commissioned by WE Energies themselves back in 2009 (rebago-25 in the document list) concluded that excess DER production is worth about $0.15/kWH to Wisconsin Electric over my array’s 30 year lifetime. Another, commissioned by Duke Energy in NC (attachment in renew-int-20 in the document list) showed that the total cost of DER PV production is between $1.43 and $9.82 per mWh of PV energy. This is primarily due to the fact that the generation fleet must be constantly cycled up and down to balance the grid during high DER production.

According to PVWatts, my 4KW array can put out 5.2mWh/year. So, using worse case I get 9.82 * 5.2 = $51.06/year and using best case I get 1.43 * 5.2 = $7.44/year. That’s what WE Energies spends to balance my excess generation according to the Duke study.

The .15/kWh cited in the 2009 WE Energies study is harder to quantify. It is based in part on the fact that the excess energy from my house directly powers my neighbors during peak sunlight and WE energies still gets to charge them peak rates. Our local step-down transformer never even sees a negative current flow during this time because overall net energy still flows towards the customer. WE Energies is realizing this credit whenever the instantaneous energy flow from my house is negative. Consequently, I would argue that the value itself is not 0 over the course of a year, but does represent some credit against the $7.44 to $51.06 yearly cost.

Therefore, at worst case, based on the two studies in the docket, I owe WE energies something less than $51 per year and at best case, WE Energies may actually owe me a credit.

Instead, WE Energies proposes to charge me $221.95/year using the proposed COGS-NM tariff (I won’t be eligible for COGS-NP because I have a parallel meter configuration). This is not only 4 times higher than the worst possible case above ($51.06 + $0 credit for excess generation) but is also about a third of the total annual electricity that my array produces ($725/year according to the PVWatts calculator). Additionally, this percentage will actually go up as my array degrades over its 30 year lifetime.

How can this be considered fair?? Why is WE Energies demonizing me in their advertising campaign promoting the new rates? I run only a 4KW DER facility that I paid 11K out of pocket to install. I absorb all ongoing maintenance. WE Energies gives me no quarter for that. The Energy I produce is carbon free and counts towards Wisconsin’s renewable energy target. Why am I being made out to be the monster not paying my fair share of the grid in their advertising eyes?

In conclusion, I would urge the commission to reject the COGS rate proposals. Additionally, since DER PV facilities such as mine represent only a small percentage of the current energy mix, there is time for a more careful consideration of the situation. Based on this, I would also urge the commission to request a fair, unbiased, and in-depth study from a non-involved third party. This study should take into account all viewpoints and would be specifically focused on Wisconsin’s unique Energy perspective.

I believe that Wisconsin needs to focus on creating a smart grid with an inherent ability to autonomously store and distribute excess energy. With such a grid, DER facilities throughout the state can take large scale advantage of variable yet renewable resources to the benefit of all Wisconsin energy consumers.